Back
when Microsoft first rolled out its Xbox Live network and charged
gamers to play multiplayer games, many thought it was a mistake that
would come back to haunt Microsoft. As it turns out, the decision to
charge for Xbox Live was a great one by Microsoft making Xbox Live
one of the only profitable parts of its gaming
division.

Bloomberg reports
that Microsoft has about 25 million users on Xbox Live as of the year
ending June 30. About half those users coughed up the $50 yearly fee
to play online games. With that amount of users paying for online
gaming, analysts predict that Xbox Live broke
the $1 billion revenue mark for the first
time.

Microsoft's Xbox COO Dennis Durkin
told Bloomberg that
revenue for downloads of TV shows and movies topped subscription
revenue for the first time. Considering the $50 yearly fee multiplied
by half that 25 million user number works out to $600 million,
Durkins remarks suggest Xbox Live generated about $1.2
billion.

Analyst Matt Rosoff from Directions told Bloomberg,
"Xbox Live has helped sell a lot of consoles and created a lot
of loyalty. Everyone has been talking about Microsoft’s inability
to innovate, but this is a pretty good example where they have
innovated. They timed it just right with this one."

Despite
the success of Xbox Live, many feel that Sony's PlayStation Plus
offering has an uphill fight to match Microsoft's success. One
example that illustrates this point is that there are 6 million
gamers who play Halo on Xbox Live each month. Sony reportedly has
under half that number of people playing all of its games available
online each month.

Microsoft and Activision are the only two
companies that are clearly successful in selling online gaming
according to Activision CEO Bobby Kotick. Kotick said, "When it
comes to online gaming, they’re the only significant alternative to
us." Activision owns the Blizzard MMORPG World of Warcraft.
Kotick also states that Activision wants a cut of the subscriptions
from Xbox Live since its titles like Call of Duty are generating lots
of money for Microsoft in subscriptions. He said, "We’re
driving a lot of the subscription interest and certainly hours of
game play."

Microsoft
has continued to tweak and add to its Xbox Live service over the
years to make it more appealing. In June Microsoft offered up
a Family
Pack that is set to launch this November that will let users
buy four memberships for the price of two at $100 per year. Microsoft
did offer up bad news for gamers early this year that still played on
their original Xbox consoles when it announced the discontinuation
of the service for original Xbox.

With
the success of Microsoft in selling online subscriptions for gaming,
Sony has decided to try the same tactic. Sony announced PlayStation
Plus at E3 this year. The cost per year will be $50, the
same price that Microsoft charges.

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Yep, most of you guys would be going mental, saying that only sheep bought these things because brother Jobs told them too, and how stupid would you have to be to buy more than 1 of them and be happy about it? However, as Micro Soft made the xBox 360 a lot of you guys all queue up to say, well done MS, they made the right calls...

lol

I am not one to bash Apple or anyone who buys their products. I don't own anything made by em, no need, & why bash anyone for spending their money on whatever they want. I did not buy my 360 because the man told me to, I don't think anyone does this. I know alot of people like to bash Apple, I am not one, I won't buy anything from em as their prices are too high for my tastes, but God Bless anyone who does. I am not a PC gamer, most of gaming takes place on the 360, so that it is what I primarily game on, PS3 2nd, & as far as I am concerned, it has had less issues than both my PS1 or PS2. I think we all agree, the RROD fiasco, shouldn't have happened, no one is happy about that. You bring up good points, big companies will try to hide things, tell us something we don't know. Here's a tip, that's not only an Apple or MS problem, but governements do the same. Not saying it's right but in the real world this is the system, big companies, government do what's in their best interests unless caught. Very simple..